It may be somewhat premature but going by auction prices at last
weekend's famous annual game fest in Outjo, it seems the high-value
game balloon has burst. Not even the most expensive animals came near
the multi-million dollar prices fetched by rare game at an April auction
near Rustenburg in South Africa.

As I argued last week, high value game is clearly in bubble
territory. This one notices by looking at the growth curve of game
prices over the past five years. They simply exploded. But there is one
structural weakness. The buyers who are all breeders, tend to buy from
one another, from one year to the next, so it is only this internal
demand, and I suppose a liberal dose of ego, that make buffaloes go for
many millions. The moment that demand evaporates, the high price will
too. And I suspect that point is very near in the future, as witnessed
by the disappointing prices at the local auction.

Granted, last weekend's auction did not offer any seriously
rare animals like rhinos, and for the relatively high price of N$290,000
for female sables, there is a plausible explanation which I have often
seen at work at game auctions. If the animal is pregnant, prospective
buyers bargain on the fact that soon they will have two animals, for the
price of one. Also, just shy of N$300,000 is not that expensive for a
breeding sable as the market value is still between N$50 000 and
N$150,000 depending on trophy value. So it is reasonable to say the cow
will provide an ample return on investment through her ten to twelve
year fertile proliferation cycle.

Another feature of the local auction is that roan fetched lower
prices than sable although much rarer than the latter. There is a good
reason for this underscoring, a point which I also argued last week.

There are only two users of live game products. The first is
breeders who hope to make a good return by producing more of the animals
that are so expensive. The second is the tourism industry, whether it is
for viewing or for trophy hunting. Roans do not make very impressive
trophies but sables do. Just imagine what a 72 inch palancas negras on
the wall does for the libido.

Furthermore, except for rhino, most of the trophy species can be
hunted in a dozen other African countries undermining the exorbitant
prices of South Africa.

Fundamentally, it has nothing to do with me what a person with
money is prepared to pay for a disease free buffalo. In the end it is
his money. But I have a huge problem when speculative bubbles prevent
local communities in Namibia from benefitting from high value game.

We are always on the lookout for new and innovative ways to
generate income for rural communities. Our community based conservation
model is one such example. By making the communities either owners or
custodians of the game on their land, poaching has all but disappeared,
and critically endangered species like rhino, elephant, and even wild
dog, have stabilised and are increasing. Now, let's expand our
model to make provision for the relocation of species of which
individuals regularly fetch prices in the thousands and even hundreds of
thousands. If we find a philanthropic investor prepared to fork out, say
N$5 million to buy the Ondjou or the N#a-Junqa conservancies 20 sables
each, then fence off one thousand hectares, and place the animals in the
care of the communities, these new breeding herds can provide the
communities with income from the animals they sell every year at game
auctions. All they have to do is look after them, and this competence
has been demonstrated over and over again by the members of the various
conservancies. But for this to work, there must be stability in demand
as well as price. If the animals cost millions each, the conservancies
cannot afford them, and every investor will baulk. If the species is too
abundant, the prices too low, the return will be negative. It has to be
a selection of very specific species, trading within a rather
predictable, but also dependable price range. Then conservancies can add
value by doing what they are uniquely qualified to do--take care of
their natural resources. The communities must protect them against both
predation and poaching, which I am convinced they will do. The only
incentive they want is that these animals must generate substantial
income for many years to come.

But if rich speculators distort the market, then they spoil the
benefits for us all. I do not want to express an opinion on the success
or failure of the Outjo game auction, I am only pointing out that
rational prices, have reopened opportunities for local communities to
share in the return generated by high value game.

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